As a general rule, you should have enough personal property coverage to protect the total value of your belongings. You can determine that value by taking a home inventory, including items like furniture, electronics, jewelry, tools, major appliances, and clothing.
Personal property insurance limits are usually based on a percentage of your dwelling insurance coverage, such as 20%, 50%, or 70%. For example, if your policy has $300,000 in dwelling insurance, a 50% limit would mean $150,000 in personal property coverage.
You can typically customize your personal property policy limit if you need more protection. However, you may need to add a scheduled personal property endorsement if you need extra coverage for certain valuables, such as fine art, collectibles, or an engagement ring.
How much does personal property insurance cost?
Personal property insurance, also called Coverage C, is a standard part of most homeowners insurance policies unless you reject it. As such, your premium reflects the overall cost of coverage, not just the itemized cost for Coverage C.
However, how much you pay for your total policy will depend on the amount of personal property coverage you choose. If you choose a lower percentage of personal property insurance, such as 20%, your premium may be lower, but you may need to pay more out of pocket to replace things like furniture, computers, appliances, and electronics if you have a large claim that exceeds your policy limit.
A higher percentage, such as 50%, may increase your policy premium slightly, but your personal property will be better protected after a covered peril.
The cost of personal property coverage will also depend on any additional coverage you add for high-value items and how you choose to be reimbursed for covered losses. Generally, this means choosing between replacement cost value or actual cash value.
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Actual cash value (ACV). With this type of coverage, your insurer will pay out a claim based on the depreciated value of damaged items.
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Replacement cost value (RCV). This type of coverage does not consider depreciation. Instead, your insurer will pay to replace items with those of the same or similar value.
Not all insurers offer replacement cost coverage, but if they do, you’ll typically pay slightly more for coverage in exchange for a higher level of protection.
What does personal property insurance cover?
Personal property insurance covers items in your home that get damaged or destroyed by a covered peril.
Some of the most common perils are:
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Fire
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Smoke
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Theft
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Vandalism
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Windstorms and hail
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Vandalism
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Falling objects
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Weight of snow and ice
A good way to think about personal property coverage is that it covers most of the items you could take with you during a move, such as appliances, electronics, computers, furniture, clothing, and jewelry. Conversely, it wouldn’t cover a household HVAC system that’s considered part of the structure of your home and covered under dwelling coverage.
Your personal property coverage can also cover items in your car, as well as belongings damaged, destroyed, or stolen while you’re traveling. However, many policies limit coverage for items not kept at your residence.
Note: Personal property coverage generally covers damages due to named perils, or those explicitly outlined in your policy. Always check your policy or ask your insurer what perils are included. You might also be able to upgrade your coverage to open perils for an additional premium.
Learn more: Open perils vs. named perils.
Personal property vs. scheduled personal property
While personal property coverage, or contents insurance, is usually included in a standard homeowners insurance policy, some policies may place a “sublimit” on some of your possessions.
A sublimit is an additional, usually lower, coverage limit that applies to certain types of losses or categories of valuable items. This is common for items like jewelry, fine art, and firearms.
For example, let’s say your $5,000 engagement ring was stolen after a break-in, but your personal property coverage has a sublimit of $2,500 for jewelry. In this case, the insurer will only cover up to the $2,500 jewelry sublimit for the loss, no matter what your main personal property coverage limit is.
Scheduled personal property coverage, a commonly available policy endorsement, can help. This policy add-on allows you to enhance coverage for specific high-value items at a higher coverage limit than what your personal property insurance provides.
You may want to consider adding scheduled personal property coverage if you have high-value items in your home, like fine jewelry, artwork, antiques, collectibles, and musical instruments. Keep in mind that most insurers require an appraisal before you can add them to your policy.
Strategies to document your personal belongings
One of the best ways to ensure you have enough personal property protection is to take a home inventory by documenting all of the items in your home. This can also come in handy when you need to file a claim.
To start a home inventory, work room by room and gather the following information for all of your belongings.
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The year purchased
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The model and brand
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Serial number (if applicable)
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Purchase price (or an estimate)
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Photo or video of the item
Make sure to update your home inventory whenever you purchase a new item or get rid of something. If the total value of your items changes significantly, call your insurance agent and update your personal property coverage limit.
Can you opt out of personal property coverage?
Yes, some insurance companies let you opt out of personal property insurance when you purchase a homeowners insurance policy, but it depends on the insurer and the policy.
While opting out of personal property insurance may result in a lower premium, it’s not usually advisable. If you decline personal property insurance and your possessions are destroyed in a total loss, the savings likely won’t add up to the entire cost of replacing them.
If you’re considering dropping personal property insurance to lower your premium, there are better ways to save money. Raising your deductible, shopping around for coverage, asking about discounts, or making safety or security upgrades to your home can potentially reduce your rate.